Introduction

 

The 73^rd meeting of the Executive Committee, which took place in Paris, France from 9 to 13 November 2014, was attended by the representatives of 14 of the Executive Committee member Parties and by participants co-opted from 22 other countries (see attached list). Mr. Premhans Jhugroo of Mauritius presided over the meeting as Chair of the Executive Committee in 2014. Representatives of the Ozone Secretariat, implementing agencies, UNEP as the Treasurer, a representative of the Global Environment Facility (GEF), the Co-Chair of the Technology and Economic Assessment Panel (TEAP) and one member of the TEAP’s Replenishment Task Force, and representatives from the Alliance for Responsible Atmospheric Policy, the Environmental Investigation Agency and Shecco also attended the meeting.

 

The agenda for the 73^rd meeting reflected the fact that it was the second meeting of the trial of the two meeting per year schedule in 2014 and included, among other matters, the 2015-2017 business plan of the Multilateral Fund, the draft monitoring and evaluation work programme, the consolidated project completion report (PCR), UNEP’s Compliance Assistance Programme (CAP) budget, core unit costs for UNDP, UNIDO and the World Bank, the accounts of the Multilateral Fund, the administrative cost regime for the 2015-2017 triennium, and the budget for the Fund Secretariat. Several important policy documents were also on the agenda including the criteria for funding the HCFC consumption phase-out in stage II of HCFC phase-out management plans (HPMPs), a report on the fully developed Multilateral Fund Climate Impact Indicator (MCII), review of the operation of the Executive Committee (decision 70/23(d)), and a report from the Treasurer on fund transfers from the Treasurer to the implementing agencies. In the margins of the meeting, the Sub-group on the Production Sector discussed the HCFC production phase-out management plan (HPPMP) for China, and the format submissions of annual implementation plans and progress reports for an HPPMP.

The Committee took a total of 75 decisions and approved investment projects and work programme activities for 62 countries with a value of just over US $58.76 million plus US $10.03 million in support costs for bilateral and implementing agencies.

 

Status of contributions and disbursements (decision 73/1)

 

As at 8 November 2014, the balance of the Multilateral Fund stood at US $85,207,427 of which US $52,855,744 was in cash and US $32,351,683 in promissory notes. Almost 59 per cent of pledges for 2014 had been paid and the balance on the gain from the fixed-exchange-rate-mechanism stood at US $19.3 million. The Executive Committee urged all Parties to pay their contributions to the Multilateral Fund in full and as early as possible. The Treasurer was requested, in consultation with the Secretariat, to continue the discussions with the Holy See and the Government of Kazakhstan on their respective outstanding contributions to the Multilateral Fund.

 

Status of resources and planning

 

Report on balances and availability of resources (decision 73/2)

 

Implementing agencies returned funding and support costs of US $5,153,497 against completed projects and projects completed by decision of the Executive Committee to the Multilateral Fund. The Executive Committee requested bilateral and implementing agencies with projects completed over two years previously to return the balances to the 74^th meeting, to liquidate or cancel obligations not needed for completed projects and projects completed by decision of the Executive Committee, in order to return balances to the Fund by the 74^th meeting, and to return the balances from all closed projects by the 74^th meeting. Furthermore UNEP was requested to return all unobligated balances to the Fund by the 74^th meeting.

 

2014-2016 business plans and cash flow availability (decision 73/3)

 

The Executive Committee noted the update on implementation of the 2014-2016 business plan and cash-flow availability[1] and decided to add to the 2015-2017 business plan the 72 activities from the 2014 business plan that had not been approved in 2014.

 

Tranche submission delays (decision 73/4)

 

Thirty-three out of 53 activities related to tranches of HPMPs or stage I of HPMPs that were due for submission to the 73^rd meeting had been submitted on time; ten activities were subsequently withdrawn following discussion with the Secretariat. There was no indication that any of the countries with delayed tranches would be in non-compliance with the 2013 freeze on HCFC consumption. The Secretariat would send letters to the countries concerned.

 

Programme implementation

 

Monitoring and evaluation (decisions 73/5 to 73/7)

 

The Executive Committee noted the 2014 consolidated project completion report (PCR)[2] including the schedule for submission of the PCRs due and the lessons learned. Bilateral and implementing agencies were requested to submit outstanding PCRs in line with decisions 23/8 and 24/9. The World Bank should, by the end of December 2014, ensure that the PCR data in the Inventory of approved projects and in the annual progress reports were fully consistent, provide the Secretariat with the information still missing in a number of PCRs, and clear backlog of PCRs on projects. The Committee also invited all those involved in the preparation and implementation of projects to take into consideration the lessons learned drawn from PCRs when preparing and implementing future projects (decision 73/5).

 

The Executive Committee noted the desk study on the evaluation of the phase-out of the HCFC in the foam sector^[3] (decision 73/6).

 

The monitoring and evaluation work programme for the year 2015 was approved at a budget of US $91,285 for completion of the evaluation of the phase-out of HCFC in the foam sector, a desk study of refrigeration and air-conditioning (RAC) manufacturing projects, and evaluation of pilot demonstration projects on ODS disposal and destruction. The Senior Monitoring and Evaluation Officer would submit the terms of reference for the desk studies on RAC manufacturing projects and the ODS disposal and destruction demonstration projects for consideration at the 74^th meeting (decision 73/7).

 

Consolidated progress report and 2013 progress reports of bilateral and implementing agencies (decisions 73/8 - 73/13)

 

The Executive Committee noted the consolidated progress report[4] and annual progress reports on the implementation of approved projects and activities submitted by the bilateral and implementing agencies[5], and also noted with appreciation, the efforts undertaken by implementing agencies in reporting the 2013 activities and submitting reporting formats. Implementing agencies would report to the 74^th meeting on 15 projects with implementation delays and 78 projects for which and additional status report was required.

 

Project completion dates

 

The Executive Committee decided that implementing agencies should not be allowed to revise planned completion dates of CFC, carbon tetrachloride and halon phase-out projects beyond those dates decided by the Executive Committee, except there had been a decision to do so, or where it was decided that funds could be transferred to an HPMP. The Committee allowed the extension of the approved completion dates of the national phase‑out plans for Iraq, until December 2015, and for Yemen, until June 2015, owing to the political and security situation within those countries.

 

Data inconsistencies

 

With regard to inconsistencies between the data in the Secretariat's Inventory of Approved Projects and the data in the World Bank's progress report, the World Bank and the Secretariat would report on resolution of the issue of the difference in phase‑out of 11,000 ODP tonnes in the consumption sector in the Inventory of approved projects and 7,000 ODP tonnes in the production sector in the World Bank’s progress report.

 

Evaluation of the implementation of the 2013 business plans (decision 73/14)

 

The Executive Committee noted, with appreciation, that all implementing agencies had exceeded 85 on a scale of 100 in the quantitative assessment of their performance as assessed against targets in the 2013 business plans. Regarding the qualitative assessment of agencies based on input received from national ozone officers, the Committee requested relevant agencies to report to the 74^th meeting on their open and constructive discussions with the respective national ozone units of the relevant countries.

 

Status reports and compliance

 

The Executive Committee considered the documents on status reports and compliance[6],

 

Country programme implementation (decision 73/15)

 

The Executive Committee noted that 93 of the 122 country programme (CP) implementation reports for the year 2013 had been submitted through the web-based system. UNEP and UNIDO were requested to provide updates to the 74^th meeting, on the establishment of licensing systems in three countries[7]. The relevant implementing agencies were asked to provide an update, by the 74^th meeting, on the actions taken by two countries[8] to include in their licensing systems the accelerated HCFC‑control measures agreed in 2007, and to assist 10 Article 5 countries[9] in addressing discrepancies between 2013 Article 7 and country programme data.

 

HCFC demonstration projects (decisions 73/16 to 73/19)

 

The Executive Committee noted the reports of HCFC demonstration projects in the following sectors/applications: extruded polystyrene (XPS) foam; air-conditioning manufacturing; and cleaning in the manufacture of medical devices.  Bilateral and implementing agencies were requested to consider the information contained in the three final reports, when assisting Article 5 countries in preparing projects for the phase-out of HCFCs in the relevant applications or sectors. The final report on the hydrocarbon demonstration project (low-cost options for the use of hydrocarbons in the manufacture of polyurethane foams) in Egypt would be submitted to the 74^th meeting.

 

Other status reports (decisions 73/20 to 73/26)

 

The Executive Committee noted a number of other status reports pertaining to the financial audit reports for the halon, CFC production, foam, process agent II, solvent and CFC refrigeration servicing sectors in China, reports on national CFC phase-out plans in the Islamic Republic of Iran and the Philippines, the MB phase-out project in Guatemala, and three reports on ODS waste management disposal activities, and requested a number of actions to be taken as appropriate. Consideration of the report on resource mobilization for climate co-benefits submitted by UNEP was deferred until the 74^th meeting.

 

2015-2017 business plans (decisions 73/27 - 73/32)

 

The Executive Committee endorsed the 2015-2017 consolidated business plan of the Multilateral Fund as adjusted by the Secretariat and the Executive Committee[10], while noting that endorsement denoted neither approval of the projects identified therein nor approval of their funding or tonnage levels. The endorsement was on the understanding that agencies would place significantly greater emphasis on HCFC phase-out in the foam sector in stage II of the HPMPs included in their business plans for the 2016-2018 period.

 

The adjustments made included pro-rating new HCFC activities so that the total budget for the 2015‑2017 business plan reflected the decision of the Twenty-sixth Meeting of the Parties on the level of replenishment of the Multilateral Fund for the 2015‑2017 triennium and removing a number of activities.

 

Project proposals for demonstration projects for low global-warming potential alternatives and technical assistance for feasibility studies in district cooling, could be submitted as per decision 72/40(b), without a requirement for those activities to be included in business plans. Executive Committee members provided guidance and suggestions to ensure that the best proposals for demonstration projects are submitted for consideration^[11].

 

Project proposals

 

Policy issues (decisions 73/33 to 73/34)

 

Template Agreement for stage II of HPMPs (decision 73/33)

 

The Executive Committee requested bilateral and implementing agencies to use the Agreement for stage II of the HPMP for Mexico (approved in decision 73/58) as a template for draft agreements for stage II of HPMPs.  The Secretariat would review the template Agreement for stage II of HPMPs once discussions on criteria for funding HCFC phase-out in the consumption sector for stage II of HPMPs and the 20 per cent disbursement threshold had been completed.

 

Retrofit of existing HCFC-based refrigeration and air-conditioning equipment to flammable or toxic refrigerants (decision 73/34)

The Executive Committee decided that, if a country were to decide, after taking into account decision 72/17, to proceed with retrofits that used flammable substances in equipment originally designed for non‑flammable substances, it should be done only in accordance with the relevant standards and protocols.

 

Project proposals (decisions 73/35 to 73/61)

 

The Executive Committee approved 121 investment projects and work programme activities in 62 countries at a total value of US $68,784,379 (US$58,755,519 plus support costs of US $10,028,860)[12].

 

Phase-out of HCFCs

 

The agreement for stage I of the HPMP for the Democratic People’s Republic of Korea was approved for the period 2014 to 2018 for total funding in principle of US $979,272 (including support costs) bringing the total number of Article 5 countries with an approved stage I of an HPMP to 140^[13]. The Executive Committee also approved in principle funding of US $11,932,208 including support costs for stage II of the HPMP for Mexico for the period 2014 to 2022 to reduce HCFC consumption by 67.5 per cent of the baseline.

 

The Committee approved a total of US $41,820,158 (including support costs) for tranches of HPMPs or stage I/stage II of HPMPs for 15 countries^[14]. These tranches included, among others, the first tranche of stage I of the HPMP for the Democratic People’s Republic of Korea, the fourth tranches of four HCFC phase-out sector plans for China, and the first tranche of stage II of the HPMP for Mexico.

 

 

The Executive Committee approved a total of US $3,609,920 (including support costs) for the preparation of stage II of HPMPs for 12 countries[15] and funding of US $604,200 (including support costs) for verification report for stage I of HPMPs for 18 countries.

 

Other projects

 

Other projects approved included the extension of IS projects for 31 countries^[16], the final tranche of the sector plan for the phase-out of MB production in China, the pilot demonstration project on ODS waste management and disposal for Lebanon, and technical assistance for methyl bromide phase-out in Sudan (post-harvest sector) and Tunisia (palm dates).

 

UNEP’s Compliance Assistance Programme (CAP) budget for 2014 (decision 73/53)

 

The Executive Committee approved the 2015 CAP budget at a level of US $9,459,000, plus agency support costs of 8 per cent (US $756,720), on the understanding that, for the implementation of agreed activities, the expenditure of CAP funds and the responsibilities and placement of staff would remain as submitted, and that, were any changes to be proposed, UNEP would report them to the Executive Committee as soon as possible for its consideration and a decision thereon. UNEP was requested, in future submissions of the CAP budget, to continue providing detailed information on the activities for which the global funds would be used, extending the prioritization of funding between CAP budget lines so as to accommodate changing priorities, and to provide details, pursuant to decisions 47/24 and 50/26, on the reallocations made, and reporting on the current post levels of staff and informing the Executive Committee of any changes thereto, particularly with respect to any increased budget allocations.

 

UNEP was also requested to report to the 74^th meeting on actions taken to implement four recommendations from the May 2014 report of the United Nations Office of Internal Oversight Services on the audit of the UNEP OzonAction Branch, in accordance with all relevant Executive Committee decisions relating to the operation of UNEP as an implementing agency of the Multilateral Fund.

 

2015 core unit costs for UNDP, UNIDO, and the World Bank (decision 73/54)

 

The Executive Committee approved core unit funding for 2015 for UNDP of US $2,026,529, UNIDO of US $2,026,529, and the World Bank of US $1,725,000, and noted with appreciation, that the World Bank’s core unit operation was again below its budgeted level and that it would be returning unused balances.

 

Review of administrative cost regime for the 2015-2017 triennium (decision 73/62)

 

The existing administrative cost regime for the bilateral and implementing agencies would be applied during the 2015–2017 triennium. The Executive Committee requested a review of the administrative cost regime and its core unit funding budget at the first meeting of 2017, and decided to consider the terms of reference for the review at the last meeting of 2015.

 

Disbursement of funds for the HPMP for China (decision 73/63)

 

The Executive Committee noted the report on disbursement of funds for the HPMP for China[17] prepared in response to decision 72/38 and requested implementing agencies to continue monitoring the disbursement of the approved funds during stage I of the HPMP for China, and to include, when submitting stage II of the HPMP for China , the respective disbursement modality agreed on with the Government of China, along with the specific milestones that would allow for the disbursement of funds to the Government of China closer to the time when they were needed.

 

Draft criteria for funding HCFC phase-out in the consumption sector for stage II of HPMPs (decision 73/64)

 

The Executive Committee discussed, several issues related to the draft criteria for funding HCFC phase-out in the consumption sector for stage II of HPMPs, including the low level of funding for stage II of HPMPs; the need to have relevant criteria for stage II of HPMPs, as the situation had evolved and was different from the situation that had existed when the criteria for stage I were adopted; the need to address conversion in small and medium-sized enterprises (SMEs); the accessibility of alternative technologies; and the task of seeking to benefit both the ozone layer and the climate simultaneously, pursuant to decision XIX/6.  A contact group was convened and addressed a number of issues including, amongst others, funding; the efforts required from SMEs; the necessary amount for funding incremental operating costs; the view that all or most of the criteria for stage I were sufficient for stage II, as they had been the result of long negotiations and compromise; the fact that the cost-effectiveness of projects approved to date were at or below the cost-effectiveness thresholds; the cut-off date for eligibility; the date of last conversion; the level of increase in funding required to facilitate the introduction of low-GWP alternatives; and the level of funding required for the refrigeration servicing sector in low-volume-consuming countries, with a number of participants saying that more funding was required. The convenor of the contact group informed the Executive Committee that there had not been sufficient agreement to be able to adopt the draft criteria and thus the Executive Committee decided to continue discussion of the matter at the 74^th meeting.

 

Report on the Multilateral Fund Climate Impact Indicator (MCII) (decision 73/65)

 

Following consideration of the report on the fully developed MCII[18] prepared by the Secretariat, the Executive Committee requested the Secretariat to take into consideration, in finalizing the MCII, the recommendations provided by the technical experts who had undertaken independent reviews of the MCII, and to take into account, as appropriate, the fifth assessment report of the Intergovernmental Panel on Climate Change (IPCC). The Secretariat would also share the MCII tool with the IPCC and invite feedback on the tool from the World Bank in the context of its work with other Multilateral Development Banks to harmonize greenhouse gas accounting across their investment portfolios, and its work on energy subsidy reform. The outcome of these undertakings would be reported no later than the 75^th meeting.

 

The Secretariat would calculate the impact on the climate of investment projects in the refrigeration and air-conditioning manufacturing sectors by applying the revised MCII model. For investment projects in all other manufacturing sectors (aerosol, fire‑fighting, foam, and solvent) the climate impact would continue to be calculated by applying the methodologies described in paragraph 14 of document UNEP/OzL.Pro/ExCom/73/54.

 

Accounts of the Multilateral Fund (decisions 73/66 - 73/68)

 

Final 2013 accounts (decision 73/66)

The Executive Committee noted the final financial statements of the Multilateral Fund as at 31 December 2013[19], and that UNEP had received the report of the United Nations Board of Auditors for the biennium ending 31 December 2013 which included no major issues of relevance to the Multilateral Fund. The Executive Committee requested the Treasurer to record in the 2014 accounts of the Multilateral Fund the differences between the implementing agencies’ provisional 2013 financial accounts and final 2013 accounts.

 

Reconciliation of the 2013 accounts (decision 73/67)

 

The Executive Committee noted the reconciliation of the 2013 accounts[20] and a number of reconciling items, and requested the Treasurer and the implementing agencies to carry out a number of adjustments and related actions.

 

Fund transfers from the Treasurer to the implementing agencies (decisions 73/66(a)(iii) and 73/68)

 

Pursuant to decision 72/42(b)(ii) and (iii), the report from the Treasurer[21] to the Executive Committee contained information on fund transfer from the Treasurer to implementing agencies and the UNEP‑wide standard on cash advances and the 20 per cent disbursement threshold for tranches of HPMPs, and clearly showed the relationship between the two issues. The report also contained further information on the criteria used for the placement of funds to ensure risk reduction and the maximization of interest accrual. The Executive Committee noted the report and decided to maintain the current system for the management and transfer of funds under the Multilateral Fund from the Treasurer to implementing agencies.

 

Budgets of the Fund Secretariat (decision 73/69)

 

The Executive Committee noted the approved 2014, 2015, and 2016 and proposed 2017 budgets of the Fund Secretariat[22] and approved the staff and operational costs of the 2017 budget.  The Secretariat was authorized to reallocate some funds from several budget lines in the approved 2014 budget, in order to accommodate the additional cost of having the 73^rd meeting in Paris.

 

Review of the operation of the Executive Committee (decision 73/70)

 

The Executive Committee agreed to continue convening two meetings of the Executive Committee from 2015 onwards with the possibility of holding an additional brief meeting, if required, between those meetings to consider project proposals. Some adjustments to the annual work cycle were made including arrangements for progress and financial reporting by the bilateral and implementing agencies and a new document entitled “Country programme data and prospects for compliance”. The Executive Committee also noted that, in the absence of an agreement by the Executive Committee on the composition of the Sub-group on the Production Sector, the documents for the first meeting of the Sub-group in a given year would be conveyed only to the heads of Executive Committee delegations, with the consent of the country or countries concerned. Full details can be found in the text of decision 73/70.

 

The Secretariat was requested to prepare a document on the main procedures of the operation of the Executive Committee, including the roles of the Secretariat and the implementing agencies regarding their provision of advice to the Executive Committee and, where applicable, to beneficiary countries, in order to provide a basis for discussion of the roles and responsibilities of the Executive Committee, the Secretariat and implementing agencies of the Multilateral Fund, for presentation to the Executive Committee at its last meeting in 2015, with a view to improving understanding and initiating changes where necessary. The two meetings per year schedule would be reviewed at the first Executive Committee meeting in 2016.

 

Report of the Executive Committee to the Twenty-sixth meeting of the Parties to the Montreal Protocol (decision 73/71)

 

The Secretariat finalized the report of the Executive Committee to the Twenty-sixth Meeting of the Parties in the light of the discussions held and decisions taken at the 73^rd meeting of the Executive Committee and forwarded the report to the Ozone Secretariat for issuance as document UNEP/OzL.Pro.26/8.

 

Production sector (decisions 73/72-73/74)

 

The Sub-group on the Production Sector was reconvened with the following composition: Australia (facilitator), China, Italy, Japan, Mauritius, Nicaragua, Saudi Arabia, Sweden, the United States of America, and Uruguay. The Sub-group met in the margins of the 73^rd meeting on a number of matters including the draft HCFC production sector guidelines, the HCFC production phase-out management plan (HPPMP) for China, and the format for submissions of annual implementation plans and progress reports for an HPPMP.

 

The Executive Committee noted with appreciation the submission by the World Bank, on behalf of the Government of China, of the remaining information requested by the Secretariat in relation to the 2013 progress report for the HPPMP activities funded by the Multilateral Fund (decision 73/72). The verification report of HCFC production and consumption for China indicated that China had remained within its maximum allowable production and consumption targets for 2013 (decision 73/73).

 

The draft format for progress reports and annual implementation plans for HPPMPs would be used by the World Bank on an interim basis when preparing 2015 tranche of funding of the HPPMP for China. An updated format would be prepared taking into consideration the lessons learned by the World Bank for consideration at the 74^th meeting (decision 73/74).

 

Date and venue of the 74^th and 75^th meetings of the Executive Committee

 

The Executive Committee decided to hold its 74^th meeting in Montreal from 18 to 22 May 2015, and the 75^th meeting back to back with the Twenty-seventh Meeting of the Parties at a date and venue to be decided.

 

Report of the 73^rd meeting

 

A complete record of all decisions made at the 73^rd meeting can be found in the “Report of the Seventy-third meeting of the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol” (UNEP/OzL.Pro/ExCom/73/62) which is published on the Multilateral Fund’s website (www.multilateralfund.org). The report is available in Arabic, Chinese, English, French, Russian and Spanish.

 

 

Annex I - Attendance at the 73^rd meeting of the Executive Committee